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[EXECUTION COPY]
SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT, dated as of April 6, 1997 (this "Agreement"),
by and between MESA Inc., a Texas corporation ("Mesa"), and DNR-MESA Holdings,
L.P., a Texas limited partnership (the "Shareholder").
WHEREAS, Mesa, Mesa Operating Co., a Delaware corporation and a wholly
owned subsidiary of Mesa ("MOC") and MXP Reincorporation Corp., a Delaware
corporation and a wholly owned subsidiary of Mesa ("Reincorporation Sub"), have
entered into an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"; capitalized terms not defined in this Agreement have the
meanings ascribed to them in the Merger Agreement) with Xxxxxx & Xxxxxxx
Petroleum Company, a Delaware corporation ("Xxxxxx & Parsley"), which provides,
among other things, upon the terms and subject to the conditions thereof, for
(a) the merger of Mesa with and into Reincorporation Sub (the "Reincorporation
Merger") pursuant to which, among other things, the outstanding shares of (x)
MXP Common Stock will be converted into shares of New Common Stock of
Reincorporation Sub, as the surviving company in the Reincorporation Merger,
and (y) MXP Series A Preferred Stock and MXP Series B Preferred Stock shall
have the right to receive, at the holders' election, either shares of New
Common Stock or New Series A Preferred Stock of Reincorporation Sub, subject to
certain conditions; and (b) the merger of Xxxxxx & Xxxxxxx with and into MOC,
with MOC being the surviving corporation, pursuant to which, among other
things, the shareholders of Xxxxxx & Parsley will receive shares of MXP Common
Stock of Reincorporation Sub in exchange for the outstanding Xxxxxx & Xxxxxxx
Common Stock.
WHEREAS, as of the date hereof, Shareholder owns (beneficially or of
record) all of the issued and outstanding shares of MXP Series B Preferred
Stock; and
WHEREAS, as a condition to the willingness of Mesa to enter into the
Merger Agreement, Mesa has required that the Shareholder agree, and in order to
induce Mesa and Xxxxxx & Parsley to enter into the Merger Agreement, the
Shareholder has agreed, to vote, in accordance with the terms of this
Agreement, all the shares of MXP Series B Preferred Stock now owned
(beneficially or of record) and any and all shares of MXP Series A Preferred
Stock and MXP Common Stock which may hereafter be acquired by the Shareholder
(the "Shares").
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
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ARTICLE I
COVENANTS OF THE SHAREHOLDER
SECTION 1.01. No Disposition or Encumbrance of Shares. Except as
contemplated by Section 1.07 hereof, Shareholder hereby covenants and agrees
that Shareholder shall not, and shall not offer or agree to, sell, transfer,
tender, assign, hypothecate or otherwise dispose of, or create any security
interest, lien, claim, pledge, option, right of first refusal, agreement,
limitation on Shareholder's voting rights, charge or other encumbrance of any
nature whatsoever with respect to the Shares now owned or that may hereafter be
acquired by Shareholder.
SECTION 1.02. No Solicitation of Transactions. (a) From and after the
date hereof, Shareholder will not, and will not authorize or (to the extent
within its control) permit any of its partners, officers, employees, agents,
Affiliates and other representatives or those of any of its subsidiaries
(collectively, "Shareholder Representatives") to, directly or indirectly,
solicit or encourage (including by way of providing information) any
prospective acquiror or the invitation or submission of any inquiries,
proposals or offers or any other efforts or attempts that constitute, or may
reasonably be expected to lead to, any MXP Acquisition Proposal from any person
or engage in any discussions or negotiations with respect thereto or otherwise
cooperate with or assist or participate in, or facilitate any such proposal;
provided, however, that, notwithstanding any other provision of this Agreement
or the Merger Agreement, any Shareholder Representative serving as a member of
the Board of Directors of Mesa may take and disclose to the Board of Directors
of Mesa a position contemplated by Rule 14e-2(a) promulgated under the Exchange
Act (and the Board of Directors may disclose such position to the shareholders
pursuant to Section 4.3 of the Merger Agreement) and may take any other action
specifically permitted to be taken by representatives of Mesa pursuant to the
Merger Agreement.
(b) Shareholder shall, and shall cause its Shareholder
Representative to, immediately cease and cause to be terminated any existing
solicitation, initiation, encouragement, activity, discussion or negotiation
with any parties conducted heretofore by Shareholder or any Shareholder
Representatives with respect to any MXP Acquisition Proposal existing on the
date hereof.
(c) Shareholder will promptly notify Mesa and Xxxxxx &
Xxxxxxx of any inquiries it receives for information covered by clause (a)
above or the receipt by Shareholder or any Shareholder Representative of any
MXP Acquisition Proposal, including the identity of the person or group
engaging in such discussions or negotiations, requesting such information or
making such MXP Acquisition Proposal, and the material terms and conditions of
any MXP Acquisition Proposal it receives.
SECTION 1.03. Marketable Title. Shareholder represents and warrants to
Mesa that Shareholder has good and marketable title to the Shares, free and
clear of all liens, claims, charges and encumbrances (other than those arising
pursuant to the terms of the Agreement of Limited
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Partnership of Shareholder, as amended to the date hereof) and has full power
and authority to exercise all voting rights in respect thereof.
SECTION 1.04. Revocation of Proxies. Shareholder hereby revokes any and
all previous proxies granted with respect to the Shares.
SECTION 1.05. Waiver of Appraisal Rights. Shareholder hereby
irrevocably waives any appraisal rights Shareholder may have pursuant to
Article 5.11 of the Texas Business Corporation Act ("TBCA") by reason of the
Mergers and agrees that Shareholder shall not attempt to perfect any such
appraisal right pursuant to Articles 5.11 through 5.13 of the TBCA.
SECTION 1.06. Agreement to Vote the Shares for the Merger. Shareholder
agrees that it will attend (either in person or by proxy) any meeting of the
shareholders of Mesa to be held for the purpose of obtaining shareholder
approval of the Reincorporation Merger and related matters, and that
Shareholder will vote in favor of the Reincorporation Merger and each of the
related matters recommended by the Board of Directors (the "Related Matters")
all the Shares now owned (beneficially or of record) or that may hereafter be
acquired by Shareholder.
SECTION 1.07. Election. Shareholder agrees that it will elect to
receive New Common Stock upon conversion of the Shares as contemplated by
Section 2.2 and 2.4 of the Merger Agreement.
SECTION 1.08. Further Assurances. Each party hereto shall execute and
deliver such additional instruments and other documents and shall take such
further actions as may be necessary or appropriate to effectuate, carry out and
comply with all of such party's obligations under this Agreement, including
without limitation any actions reasonably requested by Mesa in connection with
obtaining any required consents or approvals to the actions contemplated hereby
under the HSR Act or the Exchange Act. Without limiting the generality of the
foregoing, none of the parties hereto shall enter into any agreement or
arrangement (or alter, amend or terminate any existing agreement or
arrangement) if such action would materially impair the ability of any party to
effectuate, carry out or comply with all of the terms of this Agreement.
ARTICLE II
MISCELLANEOUS
SECTION 2.01. Expenses. Except as otherwise provided herein, all costs
and expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.
SECTION 2.02. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance or injunctive relief in
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respect of the terms hereof. The parties further agree that specific
performance or injunctive relief shall be the sole and exclusive remedies for
any breach of Section 1.02 or 1.08 hereof.
SECTION 2.03. Entire Agreement. This Agreement constitutes the entire
agreement between Mesa and Shareholder with respect to the subject matter
hereof and supersedes all prior agreements and understandings, both written and
oral, between Mesa and Shareholder with respect to the subject matter hereof.
SECTION 2.04. Assignment. This Agreement shall not be assigned except
in accordance with the terms of the Merger Agreement.
SECTION 2.05. Third Party Beneficiary. Mesa and Shareholder agree and
acknowledge that the obligations and rights created hereby are material and
important to Xxxxxx & Parsley and that Xxxxxx & Xxxxxxx is a third party
beneficiary of this Agreement and, as such, shall have the right to enforce the
obligations of the Shareholder set forth herein.
SECTION 2.06. Parties in Interest. This Agreement shall inure to the
benefit of, and be enforceable by, the parties hereto, Xxxxxx & Parsley and
their respective successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended to or shall confer upon any person other than
the parties hereto and Xxxxxx & Xxxxxxx any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
SECTION 2.07. Amendment; Waiver. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto containing the
express written consent of Xxxxxx & Parsley. Any party hereto may (i) extend
the time for the performance of any obligation or other act of any other party
hereto, (ii) waive any inaccuracy in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any agreement or condition contained herein. Any such extension
or waiver shall be valid only if set forth in an instrument in writing signed
by the party or parties to be bound thereby and containing Xxxxxx & Xxxxxxx'x
written consent thereto.
SECTION 2.08. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the terms of this Agreement remain as originally contemplated to the
fullest extent possible.
SECTION 2.09. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail
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(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 2.09):
if to Xxxxxx & Parsley:
000 Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxxxx
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
if to Mesa:
0000 Xxxxxxxx Xxxxxx Xxxx
0000 Xxxxx X'Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
with a copy to:
Xxxxx & Xxxxx, L.L.P.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
if to Shareholder:
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
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SECTION 2.10. Termination. This Agreement shall terminate upon the
Effective Time or upon the termination of the Merger Agreement in accordance
with the termination provisions provided therein; provided that Section 1.07
shall survive the Effective Time.
SECTION 2.11. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas applicable to
contracts executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in any Texas State or federal court sitting in the City of Dallas.
SECTION 2.12. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
SECTION 2.13. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, each of Mesa and Shareholder have caused this
Agreement to be executed by its respective officer thereunto duly authorized,
each as of the date first written above.
MESA INC.
By: /s/ XXXXXXX XXXXX
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Name: Xxxxxxx Xxxxx
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Title: Vice President
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DNR-MESA HOLDINGS, L.P.
BY: RAINWATER, INC. ITS GENERAL PARTNER
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
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Title: Vice President
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